The base maximum rate limitation (MRL) is the maximum rate of production for a pool when production is not reduced by gas-oil-ratio or off-target penalties. When the pool’s production capacity is much higher than the assessed MRL, it is sometimes possible to obtain a term-based approval for production to a special MRL. The special MRL is higher than the MRL. Special MRLs are approved for pools on a fixed-term basis to allow for the acquisition of performance data and information required to make an informed decision on the optimal exploitation strategy. A term-based special MRL can be granted for production from a pool when the produced gas is conserved in accordance with Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting.

A Directive 065: Resources Applications for Oil and Gas Reservoirs application must be submitted in accordance with section 10.060 of the Oil and Gas Conservation Rules for the approval to exploit a hydrocarbon resource under a special MRL regime. Producing intervals in the hydrocarbon pool must already have been on stream, with a clear idea developed of the production performance capability before this application is submitted.

The following outlines the critical information the AER requires and the process to follow to get a special MRL approval for a hydrocarbon pool. It includes links to relevant application submission procedures and guidance documents.

Application Submission

A special MRL application must be submitted using the Digital Data Submission (DDS) System, which is under “Systems & Tools” on the AER website, www.aer.ca.

Applications are registered using the Integrated Application Registry (IAR), and all material related to an application is stored in this system.

All submissions made in relation to any application are held non-confidential by the AER and are accessible, upon request, by other interested parties.

Approval Process for a Special MRL Application

Applications are initially reviewed for administrative completeness upon receipt at the AER. An application may be closed if significantly deficient of Directive 065 requirements. If an application is declared administratively complete, a technical review will be conducted to ensure that the application includes the following (supplemental information may be requested during the technical review period):

Statements of concern (SOC) filed by parties that may be directly and adversely affected by the special MRL for which approval is sought. These SOCs are evaluated for relevance to the application, and, if relevant, may necessitate a public hearing to address the concerns before the disposition of the application. The relevance of the SOC is decided by the AER director of subsurface authorizations.

Notifications in accordance with Directive 065 guidelines.

Application referral to AER Authorizations Subsurface (Geology), which may be required for answers to questions about the pool’s expansion potential and about the existence of an associated gas accumulation;

The effect of reservoir energy depletion on the production performance trend.

The list of active producers in the pool and their completion details.

Other application process and approval considerations:

A technical memorandum, with disposition recommendations, and draft approval letter are prepared and presented for supervisory review.

The reservoir engineering manager or the manager’s delegates make the final decision on the merits of any application and signs off on the approval.

The application is finalized in accordance with the decision of the panel when a public hearing is required.

Application approvals can be appealed after disposition if an SOC is received from eligible parties. Eligibility for an SOC is based on the Responsible Energy Development Act. The filing requirements and process for a request for regulatory appeal, including form, content, and time limits, are set out in sections 30 through 33 of the Alberta Energy Regulator Rules of Practice.

Application Timelines

The processing time for this application is 65 business days and the AER aims to meet this target 95 per cent of the time. This timeline is made up as follows: